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A Perfect 10: The Flying Educators Small Equity-Based ClubA Perfect 10: The Flying Educators Small Equity-Based Club

October 16, 2014

Since 10 public school teachers got together to form the Flying Educators Flying Club in 1962, the membership has been capped at 10. For nearly all of the club’s 50-plus years, there has been a waiting list to get in. Club Secretary and Treasurer Greg Utley talks about what it’s like to be part of a small, equity-based club that operates only one aircraft.

Tell me about the club’s history. Our club has been in existence since 1962. It was started by 10 Fort Lauderdale public school teachers. To my knowledge, it’s always been a one aircraft club. From 1962 to 1995 the club only had Citabrias. In 1995 we bought our first [Grumman] Tiger, which we had until 2006 when we replaced it with another Tiger. We are at a very attractive location, Ft. Lauderdale Executive Airport; it’s a wonderful place to fly.

How many members do you have?
We are fixed at 10 by our club charter and bylaws and because of insurance, as well. The minute we go above 10 we go into a different insurance category. So that’s another reason we cap it at 10.

We have always had a waiting list to get into the club—two or three or four people waiting for a vacancy. That held true from the club’s inception all the way to the economic downturn in 2009. People were leaving and there was no one to replace the members.

The lowest we ever had was seven members. Typically, we were hovering around eight for a two- to three-year period. Beginning about six months ago, traffic started picking up again. We picked up three new members in a four-month time frame and we’re back at 10. We’ve got people waiting in the wings for vacancies, again.

Do most of your members stay for a long time?
We’ve got several long-term members and several that are brand new. Up until the mid-2000s we had a lot of members that had been with the club between 10 and 20 years. In the late-2000s we lost a lot of guys.

Our mechanic has been in the club for 27 years; I’ve been in the club for 21 years. Our president has been in for 18 years, and I would say we probably have two or three more who have been in more than 10 years. The remainder have been in less than 10 years, and the three new members for less than a year.

How do you select new members? In our club, an individual member cannot sell his share. He must sell his share back to the club, not to a new member. The reason we’re structured that way, according to the bylaws, is so the club can control the new members that come into the club.

If a club member is ready to leave, he will announce he’s ready to go and the club has 90 days to find a new member to replace him. The departing member always leaves with his full club share, which is currently $6,500, one-tenth of the value of the aircraft.

Does that change with the value of the aircraft?
Yes, the bylaws call for a reassessment of the airplane yearly. We’ve got enough balance on our Tiger now that we should start devaluing that $6,500. We haven’t at this point. But, officially it is reset once yearly.

If you reset the value of the aircraft, does each member get money back?No, the assumption is that each member has gotten his appreciated use out of the airplane and if he were to leave the club he would only get the reassessed share amount. Officially that’s the rule. As a practical matter, that rarely happens. Members generally get back what they put in.

Do you take members from the waiting list on a first come, first serve basis?
We’re not a charitable organization. We’re looking for the best members we can find. We’ve always stressed flying ability and there are other criteria – personality, general fit with the club, financial stability.

When we started getting interest recently, we had several people interested in coming into the club at the same time. One or two of them had a couple hundred hours, one or two had maybe 500, and one of the applicants was an airline pilot who had about 20,000 hours. He was the last one to apply. I flew with each one of these guys and the airline pilot had a marvelous control touch, so obviously we took him over the others.

Do you do a credit check for your members?We never have. After reading some of the online postings on AOPA, I see a lot of clubs do. We never have, and we’ve never run into a problem. But based on the fact that I know most clubs do, I think we will probably initiate that practice going forward.

Since we’re an equity club, we never extend credit. A new member coming in has to pony up his entire $6,500 before he can take the airplane solo. Typically it’s not a problem. If a member exits the club without being fully paid up, we deduct what’s owed from the $6,500.

What is your board structure?We have three club officers. The bylaws only specify three – the president, vice-president, and secretary/treasurer. Informally, the president is our avionics guy and our vice president is our mechanic, and I’m the secretary/treasurer.

Are decisions made with a majority vote, or does it need to be unanimous?We have quarterly meetings and follow Robert’s Rules of Order. To be honest with you, in 20 years I’ve never run into a situation where there was contention or difficulty coming to an agreement. According to the bylaws, majority rules. So as long as we have a quorum, we’re fine. Informally, we typically go for a unanimous vote and it’s extremely unusual when that doesn’t happen. If we want to buy a new radio or spend a little extra money on one thing or another, we’re typically able to get to a point where everybody agrees, all ten members.

What is the cost structure? A full share is $6,500, one-tenth the value of the aircraft. We recently increased the monthly dues from $145 to $175 so that the annual inspection would be covered. The monthly dues cover the hangar, insurance, and anything that is not related to the flight hours of the airplane. We found with $145 a month and $90 an hour, we could pay for everything except the annual inspection. The hourly rate includes $6 that goes into a major overhaul reserve so the bite isn’t quite so bad when that comes up. But we were paying out of pocket for the annual.

What are some of the challenges of a small club?Since we are capped at 10 members, our monthly costs have to be covered regardless [of whether we have 10 members or less]. We have had an assessment for the last two or three years to make up for those missing members.

One of the things I’ve noticed is our fixed dues tend to run a little high compared with other clubs, I’m not sure about the hourly. I think one of the reasons is that we are capped at ten members with one airplane and we probably put fewer hours on the airplane in a year than most other clubs do.

The most number of hours we’ve put on the Tiger in the past 10 or 12 years is 260 in one year, which averages about 26 hours per pilot. The fewest was in 2011, which was right in the heart of the recession and we only put 85 hours on the Tiger that year. We average between 200 and 250 hours a year. My guess is compared to other clubs that might be a little on the low side. It’s probably why on a permanent basis we’d prefer to pay a little bit more.

With a small club, are your members particularly close?We have a fairly tight-knit group. The guys enjoy getting together, and there are only ten of us so it is a reasonably close group. Camaraderie is one of the undersold parts of the flying club environment. We have lunch together every Thursday. Sometimes it’s two or three of us, sometimes it’s six or eight of us. Our Thursday lunches … it’s a wonderful way to fly.

We frequently have wash and wax parties and do a BBQ at the same time. Our hangar is right on Runway 8; it faces the runway. It wasn’t unusual for the guys to get together on Friday afternoon, set up lawn chairs and somebody would bring a six-pack and we’d enjoy ourselves watching the planes come and go.

What are some advantages of a small club?
Everybody in a 10-member club thinks of themselves as an airplane owner, not a renter. We’ve had members in the past who have stayed in the club for as many as four or five years and not flown the airplane, but they liked to take their friends to the airport and say, ‘That’s my airplane.’